China's Trump Card

Chapter 3Deglobalization Prompts De-Dollarization

3.1 Anti-Multilateralism and Anti-Sovereign Movement

Just two decades ago, globalization was a buzz word. Emerging markets—notably Brazil, Russia, India, and China (BRIC)—were deemed the next “Big Thing” and offered a greenfield for Corporate America. With a combined population of 2.5 billion in 2000, the BRIC countries were believed to be a huge opportunity for consumer business. China's manufacturing sector and India's outsourcing services provided a low-cost option for multinational corporations (MNCs). In those days, global business was the preferred stream of almost all MBA students.

During the past few years, however, the narrative of globalization has turned sharply. Public opinion has shifted. International trade is faced with an increasingly hostile environment, as it is perceived to be the culprit behind rising inequality within and between countries. Global supply chains are accused of being a major threat to jobs. Massive manufacturing and construction are blamed for being environmentally unfriendly. Within the policy circle, multilateralism is hardly functioning. The World Trade Organization (WTO) has made little progress in the Doha Round of negotiations after the breakdown in 2008. Instead, the Global Financial Crisis (GFC) has prompted policymakers to question the earlier promise of international finance. Politicians who take a hawkish stance towards trading partners have risen to prominence. Populism shapes ...